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The Value of Trade Unions in Wales Evidence Review

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The Value of Trade Unions in Wales Evidence Review The value of trade unions in Wales Evidence review Jonathan Webb, Suzanna Nesom, Craig Johnson and Helen Tilley October 2019 Our Mission The Wales Centre for Public Policy’s mission is to improve policy making and outcomes by supporting ministers and public services to access rigorous independent evidence about what works. We collaborate with leading researchers and other policy experts to synthesise and mobilise existing evidence and identify gaps where there is a need to generate new knowledge. The Centre is independent of government but works closely with policy makers and practitioners to develop fresh thinking about how to address strategic challenges in health and social care, education, housing, the economy and other devolved responsibilities. It: • Supports Welsh Government Ministers to identify, access and use authoritative evidence and independent expertise that can help inform and improve policy; • Works with public services to access, generate, evaluate and apply evidence about what works in addressing key economic and societal challenges; and • Draws on its work with Ministers and public services, to advance understanding of how evidence can inform and improve policy making and public services and contribute to theories of policy making and implementation. Through secondments, PhD placements and its Research Apprenticeship programme, the Centre also helps to build capacity among researchers to engage in policy relevant research which has impact. For further information please visit our website at www.wcpp.org.uk Core Funders Cardiff University was founded in 1883. Located in a thriving capital city, Cardiff is an ambitious and innovative university, which is intent on building strong international relationships while demonstrating its commitment to Wales. Economic and Social Research Council (ESRC) is part of UK Research and Innovation, a new organisation that brings together the UK’s seven research councils, Innovate UK and Research England to maximise the contribution of each council and create the best environment for research and innovation to flourish. Welsh Government is the devolved government of Wales, responsible for key areas of public life, including health, education, local government, and the environment. The value of trade unions in Wales 2 Contents Summary 4 Introduction 5 Part 1: Membership 7 Patterns of trade union membership 7 Social legacies and union density 14 Demographic influences upon union membership 15 The legislative environment 16 Part 2: Services and access 18 Part 3: The impact of trade unions 20 Employee outcomes - pay 22 Employee outcomes – other services 28 Employer outcomes 31 Conclusion 34 References 36 Annex 1: Key trade union legislation since 1979 47 Annex 2: Trade union representatives 51 The value of trade unions in Wales 3 Summary • This evidence review synthesises undertake action that can persuade available data on trade union employers to improve pay outcomes is membership, services and access; as increasingly restricted by the decline in well as impact - internationally, in the trade union membership and legislative UK and in Wales. It presents case study changes enacted since 1979. examples from the care, construction, contact centre and retail sectors. • Trade unions offer a range of services that can improve job quality. In the • Trade unions are an essential part of context of declining membership, the economic and political landscape in increasingly trade union activity has Wales. Although membership as a focused on providing these services percentage of total employment has alongside collective bargaining. followed a declining trend, it is higher in Evidence suggests that these additional Wales than in England, at 30.5% in services can improve job quality and 2018. This is due to a larger public minimise labour turnover. sector workforce, cultural and geographical legacies of industry in • While this review has synthesised a Wales, and political support via the range of evidence, understanding the social partnership model. overall impact of trade unions in key economic sectors is not possible given • Overall, there is little evidence to both methodological challenges and suggest that trade union presence and limited Wales specific data. Notably, activity negatively impacts the existing survey data do not reliably productivity and performance of firms capture collective bargaining outcomes. and can, in fact, serve to increase both. • The report highlights the need for • Where trade unions are recognised and further research to explore alternative there is a collective bargaining data. Producing a baseline measure of agreement in place, wage inequality is added value could guide the collection reduced if certain conditions are in of comprehensive data. This would place. Through the aggregation of better support trade unions to make preferences collective bargaining can evidence-informed decisions about how be efficient for the employer. they can improve outcomes for both employers and employees. • However, the ability of trade unions to effectively bargain for pay outcomes or The value of trade unions in Wales 4 Introduction Trade unions are an essential part of the economic landscape in many parts of the world. While many countries in the Western world have seen a marked decline in trade union membership in recent decades, trade unions continue to play a vital role in managing industrial relations, as well as contributing to the broader development of the economy and society. Trade unions are an integral part of the Welsh Government’s social partnership model: an approach taken by the Welsh Government to manage public sector workers and industrial relations. In particular, it advocates for a more balanced relationship between social partners, particularly employers and trade unions (Bowyer, 2017). This evidence review focuses on the value of trade unions in Wales. It considers international evidence, experts’ insights into activities in Wales and an analysis of key data sets (see box 1), to review key measures of union activity; outcomes that may be attributed to trade unions; and discuss mechanisms by which outcomes may be achieved. This review does not provide an historical account of trade union activity in Wales, but it presents an evidence review of their contemporary value. In particular, it focuses sequentially on membership, services and access, and the impact of trade unions. In doing so it engages with the following questions: • How has trade union membership changed in key sectors and regions and what factors might explain this change? • How do trade unions have value in Wales for both employees and employers? This includes the impact of trade unions on pay, in-work learning and training, job quality, inequality, productivity and firm performance. Part 1 of this evidence review provides an overview of trade union membership in the UK and compares this to Wales. We suggest that trade unions are in a better position to add value in Wales due to the comparatively high levels of trade union density. Part 2 provides an overview of the services offered by trade unions and access to these services. Part 3 considers the potential influence of trade unions on pay and the benefits of other services offered by trade unions for employees and employers, illustrating their impact through case studies of four sectors. We focus on the care, construction, contact centres and retail sectors, due to their importance for the Welsh economy. The care sector reflects the Welsh Government’s prioritisation of the foundational economy; and all of the sectors selected have unique characteristics including low pay, high attrition, low job satisfaction, limited opportunities for job progression, high levels of shift and part time working, and low health The value of trade unions in Wales 5 and safety standards. These conditions are reflected in different levels of trade union membership. We conclude by providing a summary of the evidence base, highlighting gaps for further exploration. This review will inform a second phase of research which will convene experts to discuss the feasibility of measuring the value of trade unions over time in Wales and identify potential approaches for doing this, in the context of the Fair Work’s Commission Report (Fair Work Wales, 2019). In doing so, we hope to contribute to thinking on how to overcome the limits of existing measures of trade union impact and how to assess the value of trade unions. Box 1: Methodological note on data The data in this report are drawn from the Wales Institute for Social and Economic Research, Data and Methods (WISERD) statistical compendium of trade union statistics (1995-2014). This statistical collection combines data from several sources including the Workplace Employment Relations Study (WERS), the Labour Force Survey (LFS) and other data from the Department of Business, Education and Industrial Strategy (BEIS). These include union density (membership), union presence (where a representative is present in the workplace) and union coverage (where pay and conditions are agreed in negotiations). As these data draw on multiple sources, a more accurate picture of trade union trends is presented, in comparison to single source statistics such as the official trade union statistics, which draw exclusively on the LFS survey. As BEIS publishes the National Statistics on trade union membership annually using LFS data, the report uses 2018 data on trade union membership. Some limitations of the various data sets are
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